Here we go again. This is a somewhat early release for this publication because I am away over the coming days. In fact, I’d be head-banging somewhere in the English north just as you are possibly scanning through the below.
I have never participated in a multi-day festival, camping and the whole lot. Some friends persuaded me last year and I foolishly agreed, I hope I won’t be made to regret it. I will have a thing or two to say in next week’s post I’m sure.
So let’s dive straight into this week’s happenings.
ES (mini S&P future) is showing signs of being overextended. Reversal signs are flashing. Remember, this does not typically call the end of the prevailing trend which is still a buy according to the mighty model (I need a good name for the model, catchy ideally).
Model: Long
Reversal: Flashing
NQ (Nasdaq future) shows similar dynamics and has frustratingly a long spell of overbought conditions flashing which is rather rare. I wouldn’t press the buy button here.
Model: Long
Reversal: Flashing hot
RTY (Russell 2k future), meanwhile, has triggered a model long over the past few sessions. This is a flip from the previous one being short. We have also flashing reversal signs popping up which would indicate that some sudden upside euphoria is in place and probably due for a reversal. Meanwhile, we are edging to closing just north of the 200-day moving average. Let’s see how this plays out over the next week.
Model: Long (flipped from short)
Reversal: mild first flashing sign
HSI (Hang-Seng), the model is short. It’s a good showcase of how a reversal signal has highlighted an oversold condition. The index jumped just to be rejected at the 20-day moving average.
Model: Short
Reversal: Oversold condition has now passed
Bovespa (Brazil), is another decent example of how a recent upside lift has resulted in some consolidation just to allow for another leg higher which seems to be now in play.
Model: Long
Reversal: None
ZT (US 2-year future). We are closing in back to the recent lows. Talk about June / July stop-and-go monetary policies is not good news for front-ends.
Model: Short
Reversal: None
ZN (US 10-year future) has undone roughly half of the recent rally. While most of the action is being felt in the very short end the 10-year part proved a bit more resilient. Monday’s, post-NFP price action was encouraging as we printed a green candle after a further sell-off during the early trading session.
Model: Short
Reversal: None
UB (Ultra-long future), has held in best, underlying the general flattening pressure over the past weeks.
Model: Short
Reversal: None
Bund (German 10-year), the model has been chopped long / short here, indicative of a noisy environment without a clear direction. Observationally, it is ranging which usually indicates redistribution, so let’s see. Worth keeping an eye out for when those ranges break. 90% of people expect an upside breakout.
Model: Short
Reversal: None
BTPS (Italy 10-year bond future). The model bought the recent uplift after the boring range coil. Now we are touching the 200-day line and we are prompted with a reversal signal now. Again, this would mean a setback and then a resumption of the uptrend.
Model: Long
Reversal: In play and triggered
US 2-10s curve, I have mentioned the further flattening pressure given the front-end underperformance. The model has triggered another short.
Model: Short (Flatter)
Reversal: None
Germany 2-10s curve, similar to the US, the model indicates further flattening pressure. Meanwhile, the reversal signals are flashing which would indicate a steepening trend in the coming sessions.
Model: Short
Reversal: Flashing red for reversal
EURUSD, continues to hold the 200-day average. Model is still short, tug of war right here.
Model: Short
Reversal: None
USDJPY, reversal damped the upside trend nicely just to resume the upward drive.
Model: Long
Reversal: passed last week
NOKSEK, interesting. The model was short up until recently. Reversal hit and, in this case, the bounce was strong enough to trigger a buy signal.
Model: Long
Reversal: None
AUDCAD, big rejection at the 50-day average. This came after a nice bounce from oversold levels which the model nicely highlighted.
Model: Short
Reversal: Triggered and passed a week ago
Copper, behaves ironically similar to the AUD/CAD chart above. Rejection at major levels while the indication is still to be short.
Model: Short
Reversal: recent reversal flagged
Gold, the model is still not a fan. A coiling behaviour pattern under the shorter-term averages. This is in line with the behaviour of bond markets. No clear direction.
Model: Short
Reversal: None
Crude, the model is still short and all price actions is still under the moving averages. The most recent attempt to capture a close above failed for now.
Model: Short
Reversal: None
BTC/USD: Quite a great action zone between the 200-day and shorter-term averages. Nice bounce from lower support.
Model: Short
Reversal: None
Music
It would seem only appropriate to go down the more heavy route since I will be enjoying some quality festival time in a tent surrounded by metal freaks. Wish me luck.
One of my all-time favourite workout tracks.
Your,
Master of Paper